EMPLOYMENT AGREEMENT FOR EXECUTIVE OFFICER
THIS EMPLOYMENT AGREEMENT FOR EXECUTIVE OFFICER ("Agreement") made as of
the 1st day of November, 1996, between STB SYSTEMS, INC., a Texas corporation
(the "Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("Executive").
WHEREAS, Executive possesses an intimate knowledge of the business and
affairs of the Company, its policies, methods, personnel, and plans for the
future;
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that Executive's contribution as Executive Vice President and Chief Operating
Officer to the growth and success of the Company has been substantial and
desires to assure the Company of Executive"s continued employment in an
executive capacity and to compensate him therefor; and
WHEREAS, Executive is desirous of committing himself to serve the Company
on the terms herein provided.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties agree as follows:
1. EMPLOYMENT. The Company hereby agrees to continue to employ Executive
and Executive hereby agrees to continue to serve the Company, on the terms and
conditions set forth herein for the period commencing on the date hereof and
expiring on October 31, 1997 (unless sooner terminated as hereinafter set
forth); provided, however, that commencing on October 31, 1997, and each October
31 thereafter, the term of this Agreement shall automatically be extended for
one additional year unless, at least 30 days prior to any such October 31, the
Company or Executive shall have given notice that it does not wish to extend
this Agreement. The term of this Agreement, as it may from time to time be
extended in accordance with this Paragraph, may be referred to herein as the
"Period of Employment."
2. POSITION AND DUTIES. Executive shall serve as the Executive Vice
President and Chief Operating Officer of the Company performing the functions
and duties as shall be prescribed from time to time provided that such functions
and duties are consistent with and attendant to Executive's position or other
positions that he may hold from time to time. Executive shall devote his full
working time and efforts to the business and affairs of the Company and the
promotion of its interests and perform all duties and services on behalf of the
Company necessary to carry out such functions.
3. COMPENSATION AND RELATED MATTERS.
a. BASE SALARY. Initially, Executive shall receive an annual base
salary ("Base Salary") at the rate of Two Hundred Twelve Thousand Dollars and
No/100 Cents ($212,000.00) during the period ending October 31, 1997.
Thereafter, Executive's Base
Salary shall be redetermined at least 30 days before each October 31 in an
amount to be fixed by the Compensation Committee. The term "Base Salary" as
used in this Agreement shall mean, at any point in time, Executive's annual
base salary at such time. The Base Salary shall be payable in substantially
equal semi-monthly installments and shall in no way limit or reduce the
obligations of the Company hereunder.
b. INCENTIVE COMPENSATION. In addition to Base Salary, Executive is
eligible to receive incentive compensation in accordance with the Company's
Profit Sharing Incentive Plan.
c. EXPENSES. During any Period of Employment, Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
him (in accordance with the policies and procedures then in effect and
established by the Company for its senior executive officers) in performing
services hereunder, provided that Executive properly accounts therefor in
accordance with Company policy.
d. OTHER BENEFITS. Executive shall be entitled to continue to
participate or receive benefits under all of the Company's Employee Benefit
Plans in effect on the date hereof, or under plans or arrangements that provide
Executive with at least substantially equivalent benefits to those provided
under such Employee Benefit Plans. As used herein, "Employee Benefit Plans"
include, without limitation, each pension, and retirement plan; supplemental
pension, retirement, and deferred compensation plan; savings and profit sharing
plan; stock ownership plan; stock purchase plan; stock option plan; life
insurance plan; medical insurance plan; disability plan; and health and accident
plan or arrangement established and maintained by the Company on the date
hereof. Executive shall be entitled to participate in or receive benefits under
any employee benefit plan or arrangement which may, in the future, be made
available by the Company to its executives and key management employees, subject
to and on a basis consistent with the terms, conditions, and overall
administration of such plan or arrangement. Nothing paid to Executive under the
Employee Benefit Plans presently in effect or any employee benefit plan or
arrangement which may be made available in the future shall be deemed to be in
lieu of compensation payable to Executive under Subparagraphs 3(a) and 3(b).
Any payments or benefits payable to Executive under any plan or arrangement
refer-red to in this Subparagraph 3(d) in respect calendar year during which
Executive is employed by the Company for less than the whole of such year shall,
unless otherwise provided in the applicable plan or arrangement, be prorated in
accordance with the number of days in such calendar year during which he is so
employed. Should any such payments or benefits accrue on a fiscal (rather than
calendar) year, then the proration in the preceding sentence shall be on the
basis of a fiscal year rather than calendar year.
e. VACATIONS. Executive shall be entitled to the number of paid
vacation days in each calendar year determined by the Company from time to time
for its senior executive officers. Executive shall also be entitled to all paid
holidays given by the Company to its senior executive officers.
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4. OFFICES. Executive agrees to serve as a director of the Company, if
elected or appointed thereto, provided he is indemnified for serving in such
capacity on a basis no less favorable than is currently provided by the
Company's By-laws.
5. CONFIDENTIAL INFORMATION. Executive acknowledges that in the course
of his employment with the Company, he will gain a close, personal and special
influence with the Company's customers and will be acquainted with the Company's
business affairs, information, trade secrets, and other matters which are of a
proprietary or confidential nature, including but not limited to the Company's
operations, business opportunities, price and cost information, finances,
customer names, prospects and customer lists, business plans, various sales
techniques, manuals, letters, notebooks, procedures, reports, products,
processes, services, inventions, research and development, and other
confidential information and knowledge (collectively, "Confidential
Information") concerning the Company's business. The term "Confidential
Information" shall not include information which (a) is or becomes generally
available to the public through no violation of this Agreement, (b) was
available to Executive on a nonconfidential basis prior to disclosure to
Executive by the Company, or (c) becomes available to Executive on a
nonconfidential basis from a source other than the Company, provided that such
source is not bound by a confidentiality agreement with the Company. The
Company agrees to provide such Confidential Information and/or training which
the Company deems necessary or desirable to aid Executive in the performance of
his duties. Executive understands and acknowledges that such Confidential
Information is confidential, and he agrees not to disclose such Confidential
Information to. anyone outside the Company. Executive further agrees that he
will not during employment and/or at any time thereafter use such Confidential
Information in competing, directly or indirectly, with the Company. At such
time as Executive shall cease to be employed by the Company, he will immediately
turn over to the Company all such Confidential Information including papers,
documents, writings, electronically stored information, other property, and all
copies of them provided to him during the course of his employment with the
Company. During or upon termination, for any reason, of Executive's employment
with the Company, Executive shall sign a list acknowledging the Confidential
Information of which he has gained knowledge or information during the course of
his employment with the Company. The obligations of this Paragraph 5 shall
continue beyond the termination of Executive's employment, regardless of the
reason for such termination, and shall be binding upon Executive's assigns,
executors, administrators, and other legal representatives.
6. CONFLICT OF INTEREST. In keeping with Executive's fiduciary duties to
the Company, Executive agrees that while employed by the Company he shall not,
acting alone or in conjunction with others, directly or indirectly, become
involved in a conflict of interest or, upon discovery thereof, allow such a
conflict to continue. Moreover, Executive agrees that he shall immediately
disclose to the Company any facts which might involve any reasonable possibility
of a conflict of interest. It is agreed that any direct or indirect interest,
connection with, or benefit from any outside activities, where such interest
might in any way adversely affect the Company, involves a possible conflict of
interest. Circumstances in which a conflict of interest on the part of
Executive might arise, and which must be reported
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immediately by Executive to the Company, include, but are not limited to, the
following: (a) ownership of a material interest in any supplier, contractor,
subcontractor, customer, or other entity with which the Company does
business; (b) acting in any capacity, including director, officer, partner,
consultant, employee, distributor, agent, or the like for a supplier,
contractor, subcontractor, customer, or other entity with which the Corn any
does business; (c) accepting, directly or indirectly, payment, service, or
loans from a supplier, contractor, subcontractor, customer, or other entity
with which the Company does business, including but not limited to, gifts,
trips, entertainment, or other favors of more than a nominal value; (d)
misuse of the Company's information or facilities to which Executive has
access in a manner which will be detrimental to the Company's interest, such
as utilization for Executive's own benefit of know-how, inventions, or
information developed through the Company's business activities; (e)
disclosure or other misuse of Confidential Information of any kind obtained
through Executive's connection with the Company; (f) appropriation by
Executive or the diversion to others, directly or indirectly, of any business
opportunity in which it is known or could reasonably be anticipated that the
Company would be interested; and (g) the ownership, directly or indirectly,
of a material interest in an enterprise in competition with the Company, or
acting as an owner, director, principal, officer, partner, consultant,
employee, agent, servant, or otherwise of any enterprise which is in
competition with the Company.
7. PROPRIETARY INFORMATION. Executive agrees to promptly and freely
disclose to the Company in writing any and all ideas, conceptions, inventions,
improvements, suggestions for improvements, discoveries, formulae, processes,
designs, software, firmware, hardware, circuitry, diagrams, copyrights, trade
secrets, and any other proprietary information (collectively, the "Proprietary
Information"), whether patentable or not, which are conceived, and made or
acquired by Executive solely or jointly with others during the period of his
employment by the Company or using the Company's time, data, facilities, and/or
materials, and which are related to the products, business, or activities of the
Company which Executive conceives as a result of his employment by the Company,
and Executive agrees to assign and hereby does assign all of his interest
therein to the Company, or its nominee. Whenever requested to do so by the
Company, Executive shall execute any and all applications, assignments, or other
instruments, which the Company shall deem necessary to apply for and obtain
Letters Patent or Copyrights of the United States, or any foreign country, to
otherwise protect the Company's interest in the Proprietary Information or to
vest title to the Proprietary Information in the Company. These obligations
shall continue beyond the termination of Executive's employment, regardless of
the reason for such termination, with respect to the Proprietary Information,
conceived, and made or acquired by Executive during the period of his employment
and shall be binding upon Executive's assigns, executors, administrators, and
other legal representatives.
8. COVENANT NOT TO COMPETE.
a. In consideration for Executive's employment by the Company under
the terms provided in this Agreement and as a means to aid in the performance
and
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enforcement of the terms of the Confidential Information, Conflict of
Interest, and Proprietary Information provisions (Paragraphs 5, 6, and 7),
Executive agrees that
i. during his employment with the Company and for a period of
two years commencing from the Date of Termination (as defined in Paragraph
9), Executive will not, directly or indirectly, as an owner, director,
principal, agent, officer, employee, partner, consultant, servant, or
otherwise, carry on, operate, manage, control, or become involved in any
manner with any business, operation, corporation, partnership, association,
agency, or other person or entity that (A) is located in North America or
Europe and (B) derives at least 51 percent of its gross revenue from
developing, manufacturing, or selling graphics adapters for desktop
personal computers or from any other business in which the Company is
engaged on Executive's Date of Termination;
ii. during his employment with the Company and for a period of
two years commencing from the Date of Termination, Executive will not,
directly or indirectly, either for himself or for any other business,
operation, corporation, partnership, association, agency, or other person
or entity, call upon, compete for, solicit, divert, or take away, or
attempt to divert or take away any of the Company's customers in North
America and Europe; and
iii. during his employment with the Company and for a period of
two years commencing from the Date of Termination, Executive will not,
directly or indirectly, cause or induce any present or future employee of
the Company to accept employment with Executive or with any business
operation, corporation, partnership, association, agency, or other person
or entity with which Executive may be associated.
b. If Executive is entitled to receive the Parachute Payment Amount
under Paragraph 11, then the provisions of Subparagraph 8(a) shall not apply.
c. Any alleged breach of other provisions of this Agreement asserted
by Executive will not be a defense to claims arising from the Company's
enforcement of the provisions of this Paragraph 8.
d. Should Executive violate the provisions of this Paragraph 8, then
the period of time for this covenant shall automatically be extended for the
period of time from which Executive began such violation until he permanently
ceases such violation.
9. TERMINATION. Executive's employment hereunder may be terminated
without any breach of this Agreement under the following circumstances:
a. DEATH. Executive's employment hereunder shall terminate upon his
death.
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b. DISABILITY. If, as a result of Executive's incapacity due to
illness, accident, or other physical or mental incapacity, Executive shall have
been absent from his duties hereunder on a full-time basis for 180 calendar days
in the aggregate in any 12-month period, the Company may terminate Executive's
employment hereunder.
c. CAUSE. The Company may terminate Executive's employment
hereunder for Cause. For purposes of this Agreement, the Company shall have
"Cause" to terminate Executive's employment hereunder upon: (A) the willful and
continued failure by Executive to perform substantially his duties consistent
with this Agreement (other than any such failure resulting from Executive's
incapacity due to physical or mental illness) after notice demanding substantial
performance is delivered by the Company to Executive specifically identifying
the manner in which the Company believes Executive has not substantially
performed his duties and Executive has not cured such demands within 30 days
after receipt of such notice; (B) the willful engaging by Executive in
misconduct which is injurious to the Company, monetarily or otherwise; (C) the
willful violation by Executive of the provisions of Paragraphs 5, 6, or 7; (D)
the willful, persistent failure or refusal by Executive to follow reasonable
policies, standards, directives, or orders established by the Company; or (E)
the conviction of or guilty plea by Executive of a crime of moral turpitude or
other felony including without limitation fraud, theft, or embezzlement. For
purposes of this Subparagraph 9(c), no act, or failure to act, on Executive's
part shall be considered "willful" unless done or omitted to be done by him not
in good faith and without reasonable belief that his action or omission was in
the best interest of the Company. Notwithstanding the foregoing, Executive
shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to Executive a copy of a resolution, duly adopted by
the affirmative vote of not less than three-quarters (3/4) of the entire
membership of the Board at a meeting of the Board called and held for such
purposes (after reasonable notice to Executive and an opportunity for him,
together with his counsel, to be heard before the Board), finding that in the
good faith opinion of the Board, Executive was guilty of conduct set forth above
in clause (A), (B), (C), (D), or (E) of this subparagraph.
d. TERMINATION BY EXECUTIVE. Executive may, during the Period of
Employment, upon giving Notice of Termination, terminate his employment
hereunder (i) for Good Reason or (ii) if his health should become impaired to
such an extent that the continued performance of his duties hereunder is
hazardous to his physical or mental health or his life, provided that Executive
shall have furnished the Company with a written statement from a qualified
doctor to such effect.
For purposes of this Agreement, "Good Reason" shall mean: (A) without a
limitation of Executive's consent, an assignment to Executive of duties, or a
material the scope of Executive's duties or powers, materially inconsistent with
his designated position and not contemplated by Paragraph 2; (B) without
Executive's consent, a removal, during the Period of Employment, of Executive
from or, with respect to a term ending prior to the end of the Period of
Employment, any failure by management to nominate, or, if nominated by the
shareholders, to re-elect, Executive to any of the positions indicated in
Paragraph 2, except
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in connection with termination of Executive's employment for Cause, death, or
disability; (C) without Executive's consent, a reduction of Executive's Base
Salary to an amount less than previously determined and fixed by the
Compensation Committee in accordance with Subparagraph 3(a) other than a
reduction deemed necessary by the Board for all executive officers; or (D)
breach by the Company of any of its material obligations under this Agreement
and such breach is not cured within 30 days after written notice thereof by
Executive.
e. NOTICE OF TERMINATION. Except for terminations specified in
Subparagraphs 9(a) and 9(h), any termination during the Period of Employment of
Executive's employment by the Company or any such termination by Executive shall
be communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.
f. DATE OF TERMINATION. "Date of Termination" shall, during the
Period of Employment, mean: (i) if Executive's employment is terminated by his
death, the date of his death; (ii) if Executive's employment is terminated on
account of disability under Subparagraph 9(b), the date on which Notice of
Termination is given; (iii) if Executive's employment is terminated by the
Company for Cause under Subparagraph 9(c), the date specified in the Notice of
Termination; (iv) if Executive's employment is terminated by the expiration of
the Period of Employment under Subparagraph 9(h), the date of such expiration;
and (v) if Executive's employment is terminated for any other reason, subject to
the provisions of Subparagraphs 9(g) and 10(d) and Paragraph 11 to the
contrary, the date on which a Notice Termination is given.
g. RETIREMENT. Notwithstanding any other provision hereof to the
contrary, Executive may, at any time during the Period of Employment, upon the
giving of 90 days Notice of Termination, terminate his employment hereunder, if
Executive is then permitted to retire under the provisions of the Company's
pension plan then in effect. The Date of Termination in event of such
Retirement shall be 90 days after such Notice of Termination but in no case
shall it exceed the Period of Employment.
h. EXPIRATION OF AGREEMENT. Executive's employment hereunder shall
terminate at the expiration of the Period of Employment as provided in
Paragraph 1.
10. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
a. If Executive's employment terminates by reason of his death, the
Company shall, within 90 days of death, pay in a lump sum amount to such person
as Executive shall designate in a notice filed with the Company or, if no such
person is designated, to Executive's estate, Executive's accrued and unpaid Base
Salary to the date of
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his death, plus his accrued and unpaid incentive compensation under
Subparagraph 3(b), if any. In addition to the foregoing, any payments to
which Executive's spouse, beneficiaries or estate may be entitled to receive
under any employee benefit plan shall also be paid in accordance with the
terms of such plan or arrangement. Such payments, in the aggregate, shall
fully discharge the Company's obligations hereunder.
b. During any period that Executive fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness, Executive
shall continue to receive his accrued and unpaid Base Salary and accrued and
unpaid incentive compensation payments under Subparagraph 3(b), if any, until
Executive's employment is terminated due to disability in accordance with
Subparagraph 9(b) or until Executive terminates his employment in accordance
with Subparagraph 9(d)(H), whichever first occurs. Upon termination due to
death prior to the termination first to occur as specified in the preceding
sentence, Subparagraph 10(a) shall apply.
c. If Executive's employment is terminated for Cause, the Company
shall, through the Date of Termination, pay Executive his accrued and unpaid
Base Salary at the rate in effect at the time Notice of Termination is given and
his accrued and unpaid incentive compensation under Subparagraph 3(b), if any,
and thereafter, the Company shall have no further obligations to Executive under
this Agreement; provided, any such termination for Cause shall not adversely
affect or alter Executive's rights under any employee benefit plan of the
Company in which Executive, at the Date of Termination, has a vested interest.
d. If (A) the Company terminates Executive's employment other than
in accordance with Subparagraph 9(a), 9(b), or 9(c) (it being understood that a
purported termination under Subparagraph 9(c) which is disputed and finally
determined not to have been proper shall be a termination by the Company in
material breach of this Agreement), or (B) Executive shall terminate his
employment for Good Reason, or (C) the Company gives Executive notice that it
does not wish to extend this Agreement in accordance with Paragraph 1, then
i. the Company shall, through the Date of Termination, pay
Executive his accrued and unpaid Base Salary at the rate in effect at the time
Notice of Termination is given and his accrued and unpaid incentive compensation
under Subparagraph 3(b), if any.
ii. In lieu of any further payments to or claims by Executive
for payments of salary or incentive compensation for periods subsequent to the
Date of Termination, the Company shall pay to Executive a Severance Payment
Amount equal to the sum of (1) Executive's Base Salary and (2) Executive's
annualized incentive compensation under Subparagraph 3(b). For purposes of
calculating the Severance Payment Amount, Executive's Base Salary will be equal
to Executive's then-current Base Salary (provided, however, that if the basis
for Executive's termination is for Good Reason under
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clause (C) of Subparagraph 9(d), the Severance Payment Amount shall be based
on the Base Salary in effect prior to such reduction) and the annualized
incentive compensation will be four times the average of the amount of
incentive compensation earned in the eight full quarters preceding the
earlier of the Notice of Termination or Date of Termination. The Company
shall pay Executive the Severance Payment Amount in one lump sum on the
thirtieth day following the Date of Termination.
iii. Executive shall receive all the rights and benefits granted
or in effect with respect to Executive under the Company's qualified and
nonqualified stock option plans and agreements with Executive pursuant thereto;
and
iv. Executive shall receive payments made in lieu of accrued and
unused vacation as provided for in the Company's vacation policies.
Notwithstanding the foregoing, if Executive terminates his employment for
Good Reason, he shall be entitled to severance pay under Subparagraph 10(d)(ii)
if he gives a Notice of Termination in accordance with Subparagraph 9(e) within
30 days after the occurrence of the event or events specified in clauses (A),
(B), (C), and (D) of Subparagraph 9(d).
e. If Executive's employment shall be terminated by reason of
retirement under Subparagraph 9(g) or if Executive gives the Company notice that
he does not wish to extend this Agreement in accordance with Paragraph 1, the
Company shall have no further obligations hereunder except for continuing
obligations arising under Subparagraphs 3(c) and 9(g).
Nothing contained in the foregoing Subparagraphs 10(a) through 10(e) shall
be construed so as to affect the Executive's rights or the Company's obligations
relating to agreements or benefits which are unrelated to termination of
employment.
11. PARACHUTE PAYMENT AGREEMENT. The provisions of this Paragraph 11 of
the Agreement set forth certain terms of an agreement reached between Executive
and the Company regarding Executive's rights and obligations upon the occurrence
of a Change in Control of the Company. These provisions are intended to assure
and encourage in advance Executive's continued attention and dedication to his
assigned duties and his objectivity during the pendency and after the occurrence
of any such event. These provisions shall apply in lieu of, and expressly
supersede, the provisions of Subparagraph 10(d)(ii) regarding severance pay upon
a termination of employment, if such termination of employment occurs within 12
months after the occurrence of the first event constituting a Change of Control.
These provisions shall terminate and be of no further force or effect 12 months
after the occurrence of a Change of Control.
a. POTENTIAL CHANGE IN CONTROL. Subject to the terms and conditions
of this Agreement, in the event of a Potential Change in Control, Executive
shall remain in the
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employ of the Company until the earliest of (i) a date which is six months
from the occurrence of such Potential Change in Control; (ii) the Executive's
death; (iii) the termination of his employment by reason of his inability,
due to illness, accident, or other physical or mental incapacity, to perform
his duties for more than 180 days during any 12-month period; (iv) the
termination by the Company for Cause; or (v) the occurrence of a Change in
Control.
b. CHANGE IN CONTROL. If, within 12 months after the occurrence of
the first event constituting a Change in Control, Executive's employment
terminates for any reason other than (i) death, (ii) termination by the Company
for Cause, (iii) his inability, due to illness, accident, or other physical or
mental incapacity, to perform his duties for more than 180 days during any 12-
month period, or (iv) his Voluntary Resignation, the Company shall pay Executive
an amount equal to the applicable Parachute Payment Amount in a lump sum on the
thirtieth day following Executive's termination.
c. DEFINITIONS. For purposes of this Section 11 and this Agreement,
the following terms shall have the following meanings:
"CHANGE IN CONTROL" shall mean an event which shall be deemed to have
occurred if: (i) a merger or consolidation of the Company with or into another
corporation occurs in which the Company shall not be the surviving corporation
(for purposes of this definition, the Company shall not be deemed the surviving
corporation in any such transaction if, as the result thereof, it becomes a
wholly-owned subsidiary of another corporation); (ii) a dissolution of the
Company occurs; (iii) a transfer of all or substantially all of the assets or
shares of stock of the Company in one transaction or a series of related
transactions to one or more other persons or entities occurs; (iv) if any
"person" or "group" as those terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Act"), other than Excluded
Persons, becomes the "beneficial owner" (as defined in Rule 13d-3 of the Act),
directly or indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company's then outstanding securities; or (v)
during any period of two consecutive years commencing on or after April 1, 1995,
individuals who at the beginning of the period constituted the Board cease for
any reason to constitute at least a majority, unless the election of each
director who was not a director at the beginning of the period has been approved
in advance by directors representing at least two-thirds (2/3) of the directors
then in office who were directors at the beginning of the period. The term
"Excluded Persons" means each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., and
▇▇▇▇ ▇. ▇▇▇▇, and any person, entity, or group under the control of any of them,
or a trustee or other fiduciary holding securities under an employee benefit
plan of the Company.
"COMPANY" shall mean not only STB Systems, Inc., but also its
successors by merger or otherwise.
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"PARACHUTE PAYMENT AMOUNT" shall mean an amount equal to two times the
Severance Payment Amount payable under Subparagraph 10(d)(ii).
"POTENTIAL CHANGE IN CONTROL" shall mean an event which shall be
deemed to have occurred if (i) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in Control;
(ii) any person (including the Company) publicly announces an intention to take
or to consider taking actions which if consummated would constitute a Change in
Control; (iii) any "person" or "group" as those terms are used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Act"), other
than Excluded Persons, who is or becomes the "beneficial owner" (as defined in
Rule 13d-3 of the Act), directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the Company's then
outstanding securities, increases his beneficial ownership of such securities by
5% or more over the percentage so owned by such person on the date hereof; or
(iv) the Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control of the Company has occurred. The term
"Excluded Persons" means each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., and
▇▇▇▇ ▇. ▇▇▇▇, and any person, entity, or group under the control of any of them,
or a trustee or other fiduciary holding securities under an employee benefit
plan of the Company.
"VOLUNTARY RESIGNATION" shall mean any termination of Executive's
employment by his own act, unless such termination follows any change in his
position with the Company to a position of lesser authority, any material
changes in his duties, any reduction in his Base Salary or incentive
compensation, any material reduction of his employee benefits, any material
increase in the frequency of his travel, or any change in the circumstances of
his employment which, in Executive's good faith judgment, results in his being
unable to carry out the duties, authority, or powers attached to his position;
provided that such change, reduction, or increase occurs after the occurrence of
a Change in Control, and provided further that any sale of assets of the Company
that constitute less than 25% of the Company's assets and less than 25% of the
Company's annual revenues for the preceding fiscal year shall not result in a
change in the circumstances of Executive's employment with the Company.
12. NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
At his home address as shown
in the Company's personnel records;
If to the Company:
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STB Systems, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Secretary
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
13. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived, or discharged unless such waiver, modification, or discharge is agreed
to in writing and signed by the Executive and such officer of the Company as may
be specifically designated by the Board. No waiver by either party hereto of,
or compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, unless specifically
referred to herein, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction, and performance of this Agreement shall be
governed by the laws of the State of Texas.
14. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force
and effect. The invalid portion of this Agreement, if any, shall be modified
by any court having jurisdiction to the extent necessary to render such
portion enforceable.
15. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Dallas, Texas, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award
in any court having jurisdiction. Notwithstanding the above, the Company shall
be entitled to seek a restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of Paragraphs 5, 6, 7,
or 8; and Executive shall be entitled to seek a restraining order or injunction
in any court of competent jurisdiction to prevent enforcement of Paragraphs 5,
6, 7, or 8. Furthermore, should a dispute occur concerning Executive's mental or
physical capacity as described in Subparagraphs 9(b) or 9(d), the procedure to
resolve the dispute solely as to this mental or physical condition shall be that
described in Subparagraph 9(d), except that a doctor selected by the Company
shall also be entitled to examine Executive. If the opinion of the
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Company's doctor and Executive's doctor conflict, the Company's doctor and
Executive's doctor shall together agree upon a third doctor, whose opinion
shall be binding.
IN WITNESS WHEREOF, the parties have executed this Agreement effective on
the date and year written above.
STB SYSTEMS, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Its: President
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